Africa’s choice: Business-as-usual or a green agenda?

B. Petrie - Africa’s choice

The Paris Agreement on climate change signals the end of business as usual for energy industries.

For the first time in history more than 150 developed and developing countries have promised to reduce greenhouse gas emissions. But how binding are these agreements? And do they provide impetus for local action in Africa? Which is Africa’s choice? Business-as-usual or a green agenda?

The 2015 Paris Agreement revived the global process of curbing global warming. It has been hailed as a turning point for the low-carbon economy on the road to achieving planetary sustainability. Because of the political unity that stands behind the agreement, it also sends a strong economic signal to invest in green energy.

All this comes at a time when Africa is struggling to translate economic growth into structural transformation. Thus a review of industrial policy in Africa is necessary.

A regional approach to diversifying economic structures, alongside investment in infrastructure, particularly energy, water and transport, will establish the foundations essential to further economic growth and structural change.
With this, climate change brings increased risks (droughts and floods, rising temperatures and altered rainfall patterns), to which Africa, with its infrastructure deficit and inadequate institutional capacity, is particularly vulnerable. Consequently, African countries need to build resilient economies. The Paris Agreement, and the preceding Sustainable Development Agenda for 2030, provide clear directions for future growth and investment.

The Paris Agreement is global, but implementation depends heavily on decisive national action. A lot hinges on governments and industries deciding to take committed action now and ratcheting up future ambition. This will depend on perceptions of the related gains and losses. In preparation for the Paris negotiations, countries stated their non-binding Intended Nationally Determined Contributions (INDCs). Realising these intentions is essential to a global low-carbon future while advancing sustainable development. The process and reasoning builds on emission reductions commitments from 187 countries, starting in 2020. For the first time in history rich and poor countries have promised to reduce carbon emissions and to increase these reductions over time. Current commitments are not yet sufficient to limit global warming to the desired 1.5°C, but, the Paris Agreement binds all countries to regular reviews on progress.

Africa’s imperative

African countries have a choice: continue along a business-as-usual path or help lead the way to the new global low-carbon economy. Critically, the Paris Agreement signals the end of business as usual for global energy industries and sounds a death knell for fossil fuels. In sum, it is evident that future energy investments will need to be compatible with a zero-carbon world. Currently, the 6.5% of global GDP spent on fossil fuel subsidies translates annually into around $5.3 trillion. Redirecting part of these funds makes the growth of renewables in energy-poor regions such as Africa plausible.
In Africa, the imperative for transformation to renewable energy is essential to achieving structural transformation. Africa is endowed with substantial renewable resources, with adoption being about improved technologies and favourable pricing. The possibilities of both are evident in emerging economies around the world, providing a meaningful way of achieving the ambitious global warming goal embedded in the Paris Agreement.
Thus the focus of energy transformation in Africa is first and foremost a sustainable development prerogative. There are three primary reasons for this.